Biden extends deadline for student loan payments

On April 6, 2022, President Joe Biden announced his fourth extension on the student loan payment pause. Student debt payments were originally supposed to resume May 1, but this announcement extends the payment pause until Aug. 31, 2022.

The pause includes a suspension of federal student loan payments, a 0% interest rate on payments and stopping collections on defaulted loans. 

The COVID-19 national emergency has played a large role in Biden’s decision to extend the payment pause.

“ … As I recognized in recently extending the COVID-19 national emergency, we are still recovering from the pandemic and the unprecedented economic disruption it caused,” Biden said. 

The announcement also said the extension will help student loan borrowers achieve a higher level of financial security. 

“That additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs,” Biden said. 

Additionally, White House Press Secretary Jen Psaki announced on April 15 that student loan cancellation via an executive order by Biden is “still on the table.” Any update on this potential loan cancellation will be announced in the next few months.  

Ashley Reich, the executive director of government affairs at Liberty University, believes that students should plan to resume making payments at some point.

“It’s important that students are not adjusting their lifestyle to assume that payments won’t resume,” Reich said. 

Reich urges students who have incurred debt to start  making payments even though the student debt pause has been extended. 

“It’s incredibly important that students check their emails and remain up to date and not to ignore communications,” Reich said. “This allows (for) a great opportunity for students to get ahead on making payments on their student loans. This is the first time in history where interest won’t be tacked on or accruing.”

Reich wants students to take full advantage of this unique time. 

“If students understood the amount of interest that accrues on a student loan normally, either monthly or through sheer capitalization, they would understand how much money is being saved right now for them,” Reich said. “This is the first time in history that we have seen sort of a governmental forbearance — students are used to seeing a hardship forbearance. This is the first time where interest will not capitalize once student loans go back into repayment.”

As a part of Liberty’s mission to help raise students that are prepared for the “real world,” Liberty has established its Center for Financial Literacy which remains available for students. The center is housed under the School of Business and will meet with students one-on-one to develop specific plans for their unique stage of life.

Students that are interested in learning more about this repayment pause can visit https://studentaid.gov/announcements-events/covid-19. 

Those who are interested in learning more about financial aid at Liberty can visit liberty.edu/financialaid.

Students also looking to learn more about Liberty’s Center for Financial Literacy can visit liberty.edu/business/center-for-financial-literacy/. 

Smith is the asst. news editor.